Sugar tax confirmed: some drinks firms are a step ahead

Soft drinks with more than five grams of sugar per 100ml will see a tax hike in 2018, it was announced in the budget statement.

Chancellor Philip Hammond confirmed details of the sugar tax that will come into force in April next year. It is hoped the measure will curb rising levels of obesity and tooth decay.

18p per litre will be added to drinks with more than five grams of sugar per 100ml while those with eight grams or more of sugar per 100ml will have an extra tax of 24p per litre. A standard can of Coke, currently costing around 70p, will increase by 8p.Drinks with 5 grams of sugar will be exempt.

Other drinks likely to face a similar price hike include Irn Bru (10.5g per 100ml), Red Bull (11g per 100ml), Dr Pepper (10.3g per 100ml) and Lucozade (8.7g per 100ml).

The chancellor said money raised from the levy would go to the Department for Education (DfE) for School sports. He also added that there would be less revenue generated from the levy than previously expected as drinks companies are already taking steps to reduce the sugar content.

One such example is Coca-Cola Great Britain, announcing last year that it would spend £10m on reformulating and rebranding its Coke Zero product to better emphasise it's sugar-free formula, after a survey revealed that only five in ten people recognised it was sugar-free. In line with that promise Coca-Cola European Partners (CCEP) this week announced that it is launching a new vanilla variant of Coca-Cola Zero Sugar. The labelling on these rebranded packs makes it clear that the 'Zero' relates to sugar.

The controversial levy was first announced last March, by the then Chancellor George Osbourne, causing shares in listed drinks companies to fall. A year on, Hammond has defended the levy, as have several in the medical profession, describing it as being "Good news for our children."

However, Gavin Partington, director general, British Soft Drinks Association responded to the budget statement saying: "Given current increases in cost of goods, we're surprised the Treasury wishes to put more pressure on businesses and raise prices for hard-pressed consumers.

"It's also ironic that the tax hits the soft drinks category, which has led the way in helping consumers reduce sugar intake - down nearly 18% since 2012. We are also the only sector with a calorie reduction target for 2020.

"We support the need to address the public health challenge the country faces, but it's worth bearing in mind that there is no evidence taxing a single product or ingredient has reduced levels of obesity anywhere in the world."